This Is Getting Serious -- Barron's -- October 12, 2023

Locator: 45749CRISES.

Updates 

October 16, 2023: Fored CEO — unprecedented — pleads with UAW — becoming an existential issue. 

• the CEO would not have made this speech without board support

October 15, 2023: there now appears to be a race to see who can idle the most workers the fastest: management (layoffs); union (strike) — for management, idling workers may be better than risking the consequences of not taking preemptive action.

Original Post

From earlier today.

Now, today, from Barron's. 

The United Auto Workers strike against the Detroit-Three auto makers just entered a new phase Wednesday. It means more uncertainty for investors. It also means the auto makers and the union are still far apart on a couple of key issues.

Tuesday evening, UAW workers walked out at Ford’s Kentucky Truck Plant . It’s a move designed to inflict serious financial pain on the auto maker.

With nearly 9,000 workers, Kentucky is Ford’s largest plant in the world. F-series super duty is built there. That’s an important profit generator for Ford’s commercial business, Ford Pro. The Lincoln Navigator and Ford Expedition are built there, too. Overall, Kentucky generates about $25 billion in sales annually. Ford is expected to generate $173 billion in sales in 2023, according to FactSet.

Ford stock has fallen 1% in after-hours trading.

Now about 17,000 Ford workers are on strike, bringing the total at all three auto makers to about 33,000. Total UAW employment at the Detroit-Three is about 145,000 workers.

Ford says it has the best economic offer of the three auto makers on the table. It was unwilling to make a new offer, yesterday, Wednesday, October 11, 2023.

Since then, we've come to that space between a rock and a hard place:

President Biden has at least four crises, possibly five or six:

To start:

• Ukraine, of course, now on the back burner;
• Gaza Strip / Israel: on the front burner -- but he can delegate this one; 
• he can delegate it unless this very local issue becomes a regional issue involving the entire Mideast;
• a good time to take another look at the map of the Mideast
• we'll get an idea of how serious this is if another US a/c is ordered to the Gulf
• the Brits are sending ships now
  
• if there's a new world order, the US may not find any air bases for the USAF in the region
• certainly Turkey and Saudi Arabia aren't going to be helpful
• the UAW strike: huge distraction but at least the auto manufacturers know the White House has bigger fish to fry;
• the southern surge; blue sanctuary states have their hands full and the White House has bigger fish to fry; and, regardless, Kamala Harris is in charge of this one;
• keeping the government open after November 15, 2023
• he can't get any of his military general officers confirmed --
• I don't think folks understand how serious this is -- speaking as one who has been there
  
• if the Mideast becomes a regional war (euphemism for all-out war on Israel by the Muslim nations) I think "we" can begin to thank, at least to some degree, GOP's Senator Tuberville for what follows next.
  

Now the biggies:

• Iran -- sort of just getting started on several fronts
• Russia -- causing mischief everywhere
• China?